Question:
Find the amount to be paid if Linda borrowed a sum of $5350 at 4% simple interest for 7 years.
Correct Answer
$6848
Solution And Explanation
Solution
Given,
Principal (P) = $5350
Rate of Simple Interest (SI) = 4%
Time (t) = 7 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 4% simple interest means, Rate of Simple Interest (SI) is 4% per annum.
Method (1) Using Formula
Calculation of Simple Interest
Formula to Calculate Simple Interest
Simple Interest (SI) = Principal × Rate × Time
Thus, Simple Interest (SI) = $5350 × 4% × 7
= $5350 ×4/100 × 7
= 5350 × 4 × 7/100
= 21400 × 7/100
= 149800/100
= $1498
Thus, Simple Interest = $1498
Calculation of Amount
The total money paid to the lender by a borrower is called the Amount.
In other words, sum of priciple and interest is called the Amount.
Formula to Calculate the Amount
Amount = Principal + Interest
Thus, Amount = $5350 + $1498
= $6848
Thus, Amount to be paid = $6848 Answer
Method (2)
Calculation of Amount when Principal, Rate of Simple Interest and Time are given
Calculation of Amount directly using Principal, SI, and Time
Formula to calculate the Amount
Amount (A) = Principal (P) + Principal(P) × Rate of Interest (SI) × Time (t)
⇒ A = P + PRT
Here in the question, P = $5350
Rate of Simple Interest (SI) or (R) = 4%
And, Time (t) = 7 years
Thus, Amount (A)
= $5350 + ($5350 × 4% × 7)
= $5350 + ($5350 ×4/100 × 7)
= $5350 + (5350 × 4 × 7/100)
= $5350 + (21400 × 7/100)
= $5350 + (149800/100)
= $5350 + $1498 = $6848
Thus, Amount (A) to be paid = $6848 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 4%
This, means, $4 per $100 per year
∵ For $100, the simple interest for 1 year = $4
∴ For $1, the simple interest for 1 year = 4/100
∴ For $5350, the simple interest in 1 year
= 4/100 × 5350
= 4 × 5350/100
= 21400/100 = $214
Thus, simple interest for 1 year = $214
Therefore, simple interest for 7 years
= Simple interest for 1 year × 7
= $214 × 7 = $1498
Thus, Simple Interest (SI) = $1498
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5350 + $1498
= $6848
Thus, Amount to be paid = $6848 Answer
Similar Questions
(1) How much loan did Betty borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $7812.5 to clear it?
(2) What amount will be due after 2 years if Andrew borrowed a sum of $3900 at a 8% simple interest?
(3) Susan took a loan of $5300 at the rate of 8% simple interest per annum. If he paid an amount of $8692 to clear the loan, then find the time period of the loan.
(4) Mark had to pay $5060 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(5) Donald took a loan of $7000 at the rate of 6% simple interest per annum. If he paid an amount of $9520 to clear the loan, then find the time period of the loan.
(6) What amount does Richard have to pay after 6 years if he takes a loan of $3600 at 9% simple interest?
(7) Matthew had to pay $4452 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(8) Find the amount to be paid if Linda borrowed a sum of $5350 at 9% simple interest for 8 years.
(9) If Sandra paid $4806 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(10) How much loan did Paul borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $7370 to clear it?